Simple Financial Plan for Indian Professionals

Does the mere mention of a financial plan bring to your mind the image of a confusing document?

Something that is beyond the understanding of a normal Indian working professional?

For a lot of salaried employees the very thought of coming up with their personal financial plan can be a daunting task.

If you have ever wished that you could read about the concept of a financial plan in an easy to understand manner then this article is for you.

A Simple Financial Plan is Possible

A financial plan can be a simple document that anyone can easily make and understand.

It does not have to be a complicated document filled with heavy finance jargon.

Think of it as a plan for 5 important days in your career and your path of financial wellbeing as a professional.

A financial plan is a document that outlines a good, thought through plan to prepare for these 5 days.

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My Financial Plan for the Day I Get Fired

Lets start with a harsh truth of corporate life.

Even if your career is going great right now there is no guarantee that things will continue to be good forever.

It does not matter if you are excellent at your job or if your company is doing really well at the moment.

It is simply the nature of the environment that you are operating in. As a salaried professional you are working within a business and any business by its very nature includes risk and uncertainty.

Think about it – If the CEOs of large companies (including Fortune 500 companies) can lose their jobs then how prudent is it for you to feel completely secure about your own job.

Now to be clear, this has nothing to do with your performance as an individual.

Your job security can be impacted by events that are completely out of your personal control.

Constant changes in technology, customer tastes or other external events can impact your job.

What you CAN control however is what happens if you do lose your job.

The emotional impact of losing your job can be significant but you will be able to deal with it much better if you have already prepared for this day financially.

How Do I Prepare For This Day

First calculate your current monthly household expense.

This includes any EMI’s you are paying, the regular household expenses, school fees, utility bills etc.

If you don’t know this figure start making a note of everything you are spending on for the next 30 days starting from today. That will give you a ball park estimate of what is your present monthly expenditure.

Also include things that are paid 1-2 times a year (like school fees), but are actually part of your monthly expenses.

Now whatever figure you come up with, multiply it by 12. Make a note of that figure.

This figure is the sum of money that you need to have in a separate account as your emergency fund. Don’t touch this pot of money and make sure it can be made available to you at short notice.

This is your financial plan for the day I get fired.

Why Is This Important

The impact of losing your job will trigger an immediate worry in your mind about what it means for your personal life.

The main purpose of this emergency fund is to disconnect your professional life from your personal life.

Even though there is disruption in your professional life, your personal life can continue as normal if you have the financial cushion to sustain it for at least 12 months.

Having the emotional comfort that there is no immediate threat of losing your house, car or the ability to send your kids to school will serve as a big emotional cushion.

Furthermore, it will leave you in a much better mental state to evaluate your next career move.

My Financial Plan for the Day I Get My Ferrari

Out of the 5 steps of a simple financial plan outlined in this post, this is the one where you can go wild with your desires and ambitions.The 4 other steps are critical and non-negotiable.

This step is where you get to make your choice in a truly independent fashion.

It is about the fruits of your hard work at office. The things that you want to spend your money on. The things you want to do based on your individual preference and choice.

It is unique to every individual and there are no right or wrong answers.

As an example, you might want to use your savings to fund your daughter’s college education so that she can start her career debt free.

Someone else in the same situation may prefer his daughter to fund her education by taking an education loan on her own. That would make her more independent and responsible even before she starts her career.

It is all about your personal beliefs and financial dreams.

So sit down and make a list of the BIG things that YOU want to do with your money.

I would love to own a Red Ferrari

Want to own 2-3-4 houses

Intend to pay for my kid’s college education

Go on a world tour

I want to help my kid start a business

I want to . . . . . . (Fill in the blanks)

How Do I Prepare For This Day

Now that you have prepared a list of the BIG things that you want in life it is time to start preparing for them.

For each of these things that you WANT, you need to figure out WHEN you want them. For example, do you want to go for a world tour next year or 8-10 years from now?

Once you have fixed a time frame for each of your dreams, you will need to work backwards from that date in the future and prepare your financial actions to get there.

You can do this planning using online tools or by taking the help of a good financial advisor.

Why Is This Important

Unless you have an actionable financial plan to make them a reality, your financial dreams will remain just that – Dreams.

Without a clear path to reach your goals there will always be the temptation to spend your money on something else that comes to your mind.

Moreover keeping your goals in mind will also help you feel more motivated at your job.

Every single day at work is helping you get closer to your goals that you have listed in your financial plan.

My Financial Plan for the Day I Get My Own Secret Service

It would be great if we could afford our own secret service or personal security to protect us and the things that we own.

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Since that looks rather unlikely given that you are still in your corporate job, the next best thing we can do is to buy insurance.

You should buy insurance for the things you want to protect from the forces of fate, nature or other actors on this planet.

How do you decide what is worth protecting?

You should protect the things that have the potential to derail your financial journey if something happens to them.

One thing to remember here – You only want to pay for protecting your assets and nothing else.

Insurance is not investment. Combining insurance with investment is never a good idea so always treat them separately.

An insurance salesperson might try to sell you some investment disguised as an insurance to earn more commissions.

For example – A common sales pitch you will hear is that by buying cheap term life insurance plans you will get nothing back if you are still alive when you are 80 years old.

Just think about it – If you are still alive when you are 80 that in itself is a great outcome. Isn’t’ it?

It is best to go with the simple life insurance rule.

How Do I Prepare For This Day

Make a list of all the assets that you need to make your financial dreams come true.

Some of the main ones for most working professionals include:

Your Life, Health (including any dependents) and House.

Include any other major asset that you believe is personally important to you. So important that you will definitely want to replace even if it means disrupting your other financial plans.

Why Is It Important

All you need to realise the importance for this day is to just remember Murphy’s Law.

You may have seen it in action at your office from time to time – Something that can go wrong, will go wrong! (Remember that time when your laptop refused to connect to the projector just before an important presentation)

We don’t have the ability to predict when something will go wrong. However, you do have the ability to be prepared for the day when something does go wrong.

That is where insurance comes in. If you are lucky then everything will go as expected and you will never end up using your insurance.

However if something were to go wrong, a proper insurance will ensure your financial plans can continue as if nothing happened.

My Financial Plan for the Day I Tell My Boss What I Really Think of Him

Yes, the day that you have been waiting for. You have looked forward to it every time you had a rough day in office.

(By the way, if you have a good boss you don’t have to wait for many years to voice out your opinion.)

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This financial planning step is for the day that you retire from your salaried job.

Different people will have different ideas on what this day will involve.

For someone it may be the day you quit your job and decide to start you own business.

Or you may choose to retire early if you have figured out how much money is enough to retire early.

For most others it will be the day you retire from your job due to your age.

No matter how you get to this day it is important to be prepared for what the following day will bring.

You may no longer have to see your boss every day but you will also stop seeing your salary coming to your bank account every month.

How Do I Prepare For This Day?

The further away this day is in the future, the more time you have to plan for it.

Therefore, the sooner you start on this task the better off you will be.

What makes planning for this day particularly difficult is this: Since this day is so far ahead in the future, there will always be some short term financial temptation or priority that may take precedence over this.

You can get over these short term temptations by automating your retirement saving process.

By directly linking a part of your monthly take home salary towards this goal, you can put this process on an auto-pilot mode.

Also check with your employer – There may be a corporate scheme in place to link your salary account to a retirement saving plan.

Why Is This Important?

Since you are a salaried employee at some stage your employment will come to an end since all companies have a fixed retirement age.

You will retire from your job but not from your life.

Your family, friends, your favourite restaurant and the neighbourhood mall will still be there the next day.

What will be missing though will be the safety of a monthly pay-cheque.

If you have prepared well for this day, then you can simply activate your financial plan that you had for this day.

Your salary will get replaced by a monthly income from your retirement corpus.

You have the power in your hands to make this transition as smooth as possible.

My Financial Plan for the Day I Have a Building Named After Me

We have not yet figured out a way to take our money with us when we leave this world. We need to settle for the next best option.

If you plan things well there is a good chance you might get a school, hospital or any other cause close to your heart that you want as your legacy.

But here is the thing – All of this will likely happen when you are no longer around on this planet.

You have worked so hard all your life to earn your money.

Make sure that this money will be used in the way that you desire even if you are not around.

How Do I Prepare For This Day

To make sure your money does what you want it to do when you are gone, write a “WILL”.

This “WILL” is a document which outlines your wishes about what should happen to your savings. Yes it also includes your red Ferrari and any other assets that you have accumulated over the years.

Why Is This Important

Remember the time when you had to sort out the mess when a colleague left the company without a proper notice period or handover.

It was so difficult to find the information to take over his role. There was no well-documented handover plan of his duties.

Your “WILL” is your handover plan. It gives a clear plan of action on how things should be handled when you are no longer around.

Life will become so much easier for your dependants or beneficiaries that you want to leave your assets to.

It will also avoid any chance of confusion if you would like to split your assets between multiple beneficiaries.

You can specify everything in your WILL as per your wish.


Understanding or making a financial plan does not have to be hard work.

Neither do you need an advanced degree in finance or business to make it happen.

Your financial plan is the roadmap for your financial journey during your lifetime and beyond.

Your financial plan is a simple preparation for these 5 milestone days that you will encounter in your lifetime.

If you cover the 5 step plan outlined in this article you will do just fine.

In fact you will do much better compared to a large majority of people at your office.

Of course, there are many other things you can improve upon within these steps.

But that can be done once you are well on your way with your financial plan.

So if you have still not put a financial plan in place use this article as a guideline to get started.

There is no reason not to, now that you know how simple and easy it really is.

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